Charitable IRA Rollover Returns 2013 - NastGroup Financial
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Through January, you can still make one for 2012. Presented by: Kevin M. Nast

Give & receive a tax break. Schools, hospitals and other non-profit organizations are welcoming the return of the charitable IRA rollover – an opportunity that lets a traditional IRA owner aged 70½ or older donate up to $100,000 to charity with a tax perk attached.1

This donation can accomplish two very significant things: the IRA owner can subtract the gifted amount from his or her adjusted gross income, and the donation can also count toward the IRA owner’s Required Minimum Distribution (RMD) for that year. So even though an IRA owner can’t claim a tax deduction through this move, it can play a big role in an estate planning strategy.1,2

Request an asset transfer; refrain from a withdrawal. Turn to a financial or tax professional you know and trust for assistance with this, because it involves some logistics.

If you just withdraw money from your IRA and give it to a school or a charity, it is not an IRA charitable rollover. Any money that you withdraw in this fashion will be taxed as regular income.

To arrange an IRA charitable rollover, you must ask your IRA custodian to send the amount of the donation directly to a charity or qualified non-profit organization. In financial parlance, this is known as a trustee-to-trustee transfer. This requires a bit of paperwork, but the potential benefits of an IRA charitable rollover far outweigh the minutes spent.

IRA charitable rollovers cannot be made to donor advised funds, private non-operating foundations or supporting organizations. IRC Section 509(a)(3) defines a supporting organization as a charity that will “carry out [its] exempt purposes by supporting other exempt organizations”; examples include university endowment funds and non-profits providing essential services for hospital systems.3

You may still be able to make a charitable IRA rollover for 2012. When Congress reinstated this provision as a byproduct of the fiscal cliff deal, it also made it possible for a few IRA owners aged 70½ or older to make this move and have it count as part (or even all) of their 2012 RMD. This is only possible if a) you delayed taking your 2012 traditional IRA distribution until December and b) you donate cash to charity between now and January 31, 2013.1,2,4

Eligible IRA owners can even reclassify cash amounts they gave to charities in December as IRA donations, providing the donations were made after the IRA owner took his or her RMD for 2012. Again, be sure to see a qualified tax or professional about this if you are interested.4    

Kevin M. Nast is a Financial Advisor and the President of NastGroup Financial in Northville, MI 48167. He may be reached at or 248.347.1888. Kevin also services clients in West Bloomfield, Auburn Hills, Westland, Belleville, Brighton and the surrounding metro Detroit area as well as 13 additional states across the US.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.


1 – [1/6/13]

2 – [1/2/13]

3 – [8/2/12]

4 – [1/18/13]


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